Parish Finds Debris Clean-Up Doesn't Come For Free

In a 68 page decision, the Louisiana Supreme Court in Hayes Fund for the First United Methodist Church of Welsh, LLC, et al. v. Kerr-McGee Rocky Mountain LLC, et al. forcefully explained the role of an appellate court. It is axiomatic that Louisiana appellate courts are courts of review. Louisiana law specifically sets the standard of review an appellate court must apply when reviewing a trial court’s factual decisions (manifest error) or its legal decisions (de novo). According to Hayes Fund, a failure to faithfully apply the “manifest error” standard of review where applicable causes an appellate court to function as a “choice-making court” when its proper role is to serve as an “errors-correcting court.”

The plaintiffs in Hayes Fund alleged that negligence by Kerr-McGee caused two wells to stop producing, leaving valuable assets out of reach. After a lengthy bench trial which spanned a ten-month period and involved over twenty-five days of live testimony, the trial court found that the plaintiffs failed to meet their burden to prove that the defendants caused the loss. Thereafter, the Third Circuit reversed the finding of the trial court as an abuse of discretion.

The Supreme Court reversed and reinstated the ruling in favor of defendants. The Court found that the primary issues in the trial court were factual issues concerning whether the experts were credible or factually correct, thus the “manifest error” standard of review should have been applied.

According to Hayes Fund, the manifest error standard of review is accomplished by undertaking a two-step process which asks: 1) whether there was any factual basis for the trial court’s conclusions; and, 2) whether the findings of the trial court were “clearly wrong.” Applying this test requires the appellate court to do more than “simply review the records for some evidence, which supports or controverts the Trial Court’s finding.” Instead, the appellate court must review the “entire record.” The Court cautioned that an appellate court is not to “re-weigh the evidence or to substitute its own factual findings just because it would have decided the case differently.”

Through its conclusion, the Hayes Fund Court provided clear guidance moving forward, stating:

Rarely should a District Court’s choice of expert(s) be found clearly wrong because it is so difficult to find a reasonable basis does not exist for the expert’s opinion relied upon by the District Court. It is destructive to the manifest error analysis for a reviewing Court to make its choice of the evidence rather than look for clear error in the reasonable basis found by the trier of fact. We have tortuously studied this scientific and voluminous record to demonstrate a proper manifest error review.

By its own terms, the Court intends the Hayes Fund decision in to provide “guidance” as to the “proper analysis for the reviewing Court(s).” While the principles discussed in Hayes Fund are not new or novel, the emphasis given by the Court was uniquely passionate and likely to quickly become a focus of future appellate argument and briefing.

We previously reported that the Louisiana Supreme Court issued Orders suspending prescriptive, peremptive and abandonment periods for thirty days in the wake of Hurricane Ida. Governor John Bel Edwards has now issued a Proclamation. In addition to other actions, the Proclamation provides that legal deadlines applicable to “legal proceedings in all courts, administrative agencies, and boards” are suspended until September 24, 2021.

The Proclamation also authorizes hotels and motels to cancel reservations which would result in the displacement or eviction of first responders, health care workers, or anyone performing disaster-related work.

Imagine you are visiting family during the holidays. As a favor, you take a family member’s vehicle to the gas station for a fill-up. While in transit, you get into an accident where you are at fault. Does your insurance policy provide coverage for the accident?

According to La. R.S. 22:1296.1, a new statute that went into effect on August 1, 2022, the answer to this question is “yes,” your insurance may afford coverage under these facts.

La. R.S. 22:1296.1 now requires insurance policies issued in Louisiana to provide coverage when the driver insured under the policy operates a non-owned vehicle with the express or implied permission of the vehicle’s owner. The statue was enacted to declare a new public policy regarding this issue and was passed in response to the Louisiana Supreme Court’s decision in Landry v. Progressive Security Insurance Company, 2021-00621 (La. 1/28/22), reh'g denied, 2021-00621 (La. 3/25/22); 338 So.3d 1162.

The Landry case involved a motor vehicle accident that occurred as the defendant-driver, as a favor to the vehicle’s owner, drove the vehicle to a tire shop to repair a tire. The plaintiffs brought an action against the defendant-driver, the driver’s insurer, and the insurer of the vehicle that he drove at the time of the collision.

The Louisiana Supreme Court upheld a provision in the driver’s policy that stated coverage under such circumstances was only available when the driver’s own vehicle was out of service. Because the driver’s vehicle was not out of service, no coverage was found under the driver’s policy. In so holding, the Landry court found that public policy did not require automobile insurance liability coverage for a driver’s negligent operation of a non-owned vehicle.

The Louisiana legislature enacted La. R.S. 22:1296.1 in response to the Landry decision. The statute provides that an insurer writing automobile liability, uninsured, underinsured, or medical payments coverage shall not exclude the benefits of such coverage under its policy to an insured operating a non-owned vehicle if all of the following requirements are satisfied:

• The coverage is in full force and effect.
• The insured is operating a vehicle owned by another with the express or implied permission of the vehicle’s owner.
• The non-owned vehicle that is being operated by the insured is not provided, furnished, or available to the insured on a regular basis.

The statute also provides this coverage is secondary to the vehicle owner's insurance policy. Furthermore, if the coverage provided under the statute is included within the coverage provided pursuant to La. R.S. 22:1296, which addresses coverage for temporary, substitute, and rental vehicles, the provisions of La. R.S. 22:1296 determine which coverage is primary. (For additional information regarding La. R.S. 22:1296 click here.) [Sophia, please include link to blog from 5/25/22].

Let’s return to real life scenarios like those we addressed above. Perhaps you are blocked in at a party, so a friend tosses you the keys to move their car, or, like the situation in Landry, maybe you are trying to do a good deed by driving your parents’ car to a gas station for a fill-up when an accident occurs. While it remains to be seen how courts will interpret this statute in these circumstances, under the new legislation, these actions may now implicate coverage under your insurance policy.

Case Reference: Landry v. Progressive Security Insurance Company, 2021-00621 (La. 1/28/22), reh'g denied, 2021-00621 (La. 3/25/22); 338 So.3d 1162.